Filing the initial and the biennial (every two years) Statement of Information recently became much easier for California limited liability companies (LLCs). California LLCs can now file their Statements of Information online. When filing a California limited liability company Statement of Information (SOI) on-line, filers can receive a free PDF copy of the filed SOI.
Every state wants to attract businesses. Whether it is an existing business, or a brand new startup, politicians are always courting business people to move to their jurisdiction. While there are usually many states (or cities within states) vying for a new business, it used to be uncommon for states to directly attack one another in these quests. However, that is all starting to change, as evidenced by a current battle between Texas and California.
Battle Starts With Texas Poaching California Businesses
The Los Angeles Times recently reported on the ongoing battle between California and Texas over businesses. This battle has been going on, in a one-sided fashion, for more than a decade. It began with recently-indicted Texas Governor Rick Perry publicly pushing California businesses to move to Texas. And, his public statements along with pro-business government programs have been effective. One out of five businesses that relocated to Texas in 2011 and 2012 were previously California Businesses.
Last year, we featured several articles about California’s ride-sharing startups. Ride-sharing companies, such as UberX, Lyft, and Sidecar, are in the business of providing vehicles-for-hire. Using apps and other online programs, the companies connect those in need of rides with non-professional drivers driving their own cars. Two of the companies are making headlines, and the news is not so good. According to PandoDaily — the site of record for Silicon Valley — last month, a San-Francisco based Uber driver, Daveea Whitmire, allegedly verbally and physically assaulted one of his passengers who recorded some of the incident on his iPhone. Uber refused to investigate the matter, and insisted that Whitmire had passed the company’s standard background checks. Whitmire’s account has since been deactivated by Uber and evidence has emerged that Whitmire was a convicted felon.
Since Uber entered the market, its drivers have been accused of improper conduct at least three other times. The most recent incident involving an Uber driver occurred on New Year’s Eve, when an Uber driver hit and killed a 6-year-old girl who was crossing the street with her mother and brother. Uber instantly denied culpability. According to PandoDaily, “[i]n nearly all of [the] cases, Uber has responded in the same way, saying it’s not responsible for the conduct of its drivers.” In response to its decision not to investigate, Uber states that “we’re a technology platform that connects riders and providers, so it’s not our job to investigate.” Several Lyft drivers also have been accused of improper conduct, but, unlike Uber, the company apologized to its passengers and promised to investigate the situations; however, just like Uber, Lyft contends that it is not liable because it is merely a “technology platform.”
Uber and Lyft contend that they cannot be held liable for the drivers’ actions because their drivers are not employees but independent contractors. Last August, two Uber drivers filed a class-action lawsuit against the company, claiming that it is stiffing driver’s on tips. The suit addresses the very issue of worker misclassification and seeks recognition that Uber drivers are employees rather than independent contractors. Are Uber and Lyft correct when they say that they cannot be held liable for the actions of the drivers? Can they be sued for negligent hiring or vicarious liability? Even though we will not know the answers to these questions until a court rules, the headlines discussed above raise very important issues for startups and small businesses regarding the classification/misclassification of workers as employees or independent contractors and the importance of properly screening individuals before hire.
There is a growing trend in California and it is having a huge impact on startups: According to a recent article in The Recorder, a California business law publication, there has been a surge in bias claims against Silicon Valley technology companies. The figures show that employment suits against California technology companies doubled between 2000 and 2012, with discrimination suits making up the largest portion of those employment claims. Observers point out that there is a big problem among technology companies with age discrimination, sex or gender discrimination, and with African-Americans and Latinos being left out of hiring. The lack of diversity in the industry is particularly noticeable to plaintiffs lawyers, and young startup companies tend to be easy targets because they ignore employment laws in their rush to grow and succeed in the industry.
The issue of sex or gender discrimination in the industry made big news in 2012, when Ellen Pao, a former partner at the California venture capital firm of Kleiner, Perkins, Caufield and Byers, sued her former firm for gender discrimination, claiming that the firm pays and promotes men more than women, excludes women from key meetings, and fails to respond to reports of sexual harassment in the workplace. Since Pao filed her lawsuit, many more women have filed similar claims, and Pao’s attorney says he has seen an increase in gender discrimination claims based on violations of state and federal laws governing maternity and disability leave. Interestingly, Sheryl Sandberg’s book, Lean In: Women, Work, and the Will to Lead, has been credited with increasing demand letters from female employees of technology companies, who claim their employers unfairly denied them promotions. The figures seem to support the claims. According to the Institute for Women’s Policy Research, which analyzed data from the Bureau of Labor Statistics, in 2012, only 20 percent of software developers were female, earning 18 percent less than their male counterparts. On the other hand, the data also shows that the labor pool itself is male dominated, making it difficult to hire women in the industry: In 2010, women made up 57 percent of college graduates, but only 18 percent of computer and information science degrees.
Since 2010, technology companies have also been on heightened alert for age discrimination claims. That year, the California Supreme Court reversed a lower court’s grant of summary judgment to Google in a case filed by 54-year-old employee Brian Reid who alleged he was fired because of his age. Reid claimed his supervisor and other employees called him an “old man” and “old fuddy duddy.” The Supreme Court found that the remarks could be evidence of discrimination.